Plugging into electricity for the first time is a big deal. Ask Peter Okoth. Until late last year, he struggled to make a go of his bar on the main street in Entasopia, a small, dusty town in Kenya’s Rift Valley, five hours from the capital Nairobi and 30 miles from the nearest grid power line. Then, he hooked up to a new solar-powered microgrid that serves local homes and businesses.

Now Okoth has eleven light bulbs, he says proudly — and enough power to run a TV and a sound system for his customers. Seventy people show up some evenings to watch, listen and buy his food and drink. His profits will soon buy a refrigerator to keep the beer cold in the searing desert heat, and a big screen to show satellite sports channels.

“We will be staying open till midnight,” he says. And he has just bought construction materials for ten guest rooms. “When you next come, you must stay here.”

Most settlements in rural Kenya are dark at night. Only a third of the East African country’s residents have access to the national power grid. Harvesting the sun makes obvious sense in places like Entasopia. Hundred-dollar photovoltaic (PV) panels for installation on home roofs have been on sale for years.

But the meager five watts that most such systems provide is only enough to power a couple of LED lamps each evening and a mobile phone charging point, and the batteries constantly need replacing. The country is full of discarded PV cells, defunct batteries, and disappointed customers.

Village homes are filling with household appliances like refrigerators and washing machines, and the businesses on the main street are powering everything from welding equipment and fuel pumps to hair driers.

But now, larger central village PV units linked by underground cable to dozens of houses and business are starting to transform lives. For a ten-dollar installation fee, the people of Entasopia can connect to a village microgrid and buy a share of a thousand times as much power.

Microgrids are small electricity generation and distribution systems that operate independently of larger grids. Typically they rely on local sources of renewable energy, such as river flows, wind, biomass, or, most widely, the power of the sun. There are no official statistics on how many there are, or what their total power output is.

But a recent study by U.S.-based Navigant Research, which studies new energy technologies, suggested that their combined generating capacity might now exceed 750 megawatts worldwide. They are, says Daniel Kammen, of the University of California, Berkeley, “a true hot-bed of innovation popping up all over the world.”

In countries such as Kenya, whose economies are growing faster than either conventional, centralized electricity generation or power grids, the potential of microgrids to electrify powerless communities is huge. Many believe they provide the only likely route to deliver UN secretary-general Ban Ki-moon’s goal of bringing electricity to the 1.3 billion mostly rural people globally who currently lack it. And they answer a charge often made against roof-top solar power systems, which critics say can lock communities into energy poverty by offering only tiny amounts of power for each household.

Fred Pearce

<p><span>Nancy Kasia now uses solar power to pump fuel at the filling station she owns in Entasopia.</span></p>

Entasopia is as remote as it gets. It is close to the border with Tanzania, at the end of a bumpy laterite road that winds its way from Magadi, a town some 30 miles to the east. Its single street comprises houses fronted by tin-roofed buildings with businesses ranging from butchers and general stores to bars and mobile phone shops. It is where Maasai livestock herders in their bright traditional dress come to buy and sell, topping up their mobile phones before disappearing back into the bush. And it is where people from other Kenyan tribes such as the Luo, Kikuyu and Kamba have congregated since an irrigation project fed by rivers from nearby hills started watering fields of fruit and vegetables for sale to Kenyan cities.

Joseph Nyagilo, field manager for microgrid pioneer SteamaCo, picked out Entasopia for a microgrid in 2014 because of the town’s strong business activity, which he believed could benefit from the extra power that a such a system can provide. He is proud of the transformation.

At the village filling station, Nancy Kaisa uses solar power to pump fuel. “I had a diesel generator before, but this is much cheaper and easier,” she explains.

John Owino, a repairman squatting in the sun outside his workshop, says he can now carry out welding repairs that once had to be sent to distant towns. And Okoth, the entrepreneurial bar boss, said lights meant he can now get up and start work at 4 a.m. Only the owner of the kiosk selling rooftop PV panels seemed gloomy. He was getting on his motorbike to find sales in a neighboring village that did not have a microgrid.

“Light from roof systems can improve quality of life, but only microgrids can lift people out of poverty,” says Emily Moder, SteamaCo’s software manager. “They are the next step up. And by allowing people to build businesses and another source of income, they improve the resilience of rural communities against drought or climate change.”

But SteamaCo is going further. In the past three years, it has been pioneering the use of smart meters in microgrids, and it now has 25 village grids across Kenya, supplying up to 10,000 people and businesses. The idea is to link the supply hardware to pre-payment services that use the country’s popular mobile phone-based banking system, M-Pesa. Cloud-based software keeps track of supplies and payments, alerting customers by text messaging when their credit runs low. There are no contracts, no bills, and no revenue collection problems. Customers can top up their credit, in amounts as small as a few cents. But once the credit expires, the lights go out.

It is where Maasai livestock herders in their bright traditional dress come to buy and sell, topping up their mobile phones before disappearing back into the bush.

Entasopia’s PV hub, renting space in the yard of the village chief, cost $75,000 to install. It has 24 panels with a maximum generating capacity of 5.6 kilowatts. A control box below houses the smart meter that measures and controls power to each of the 64 customers in town and also communicates remotely with payments software, cutting off power when credit is exhausted.

In remote areas such as Entasopia, where wi-fi is largely absent, all data is sent by SMS. “One bar of mobile signal is all we need,” says Moder. “We can be everywhere.”

The site agent keeping a day-to-day eye on things in Entasopia is John Pambio, a young electrical engineer living down the street from the village chief, who also runs a shop repairing mobile phones and TVs. Pambio cleans the PV cells once a week and troubleshoots for customers suffering outages, trips, or damaged cables. The biggest power demand, he says, is at night, when lights, TVs, and sound systems come on. That is not a great match with solar energy production, which of course is in daylight hours. But, like most village hubs, Entasopia has battery storage sufficient for at least 24 hours of use.

Commercial microgrid PV systems still charge prices for power that are quite high. SteamaCo — and the microgrid partners that it increasingly licenses — charge between two and four dollars per kilowatt-hour. That delivers lighting more cheaply than kerosene, and power more cheaply than a diesel generator. But it is double the price of state-subsidized grid power in a city like Nairobi.

SteamaCo co-founder and chief technical officer Sam Duby believes that, just as microgrids are changing life in villages like Entasopia, so they have the potential to transform the prospects for scaling up solar energy elsewhere in Africa and the developing world.

First, replacing roof systems with village microgrids provides for the first time the amount and reliability of power that rural people want, which is enough to change their lives and livelihoods. Secondly, the smart metering that links village supply systems to pay-as-you-go charging networks, resolves the constant bugbear of village power systems — how to collect revenues from customers in poor and remote places. And thirdly, the data supplied by the smart metering has the potential to unlock the major financing that has so far shied away from committing to solar power in developing countries like Kenya.

“Steama” is Swahili for “power.” But for Duby, the power is as much about data as electricity. Now, when he and his potential investors switch on their laptops in Nairobi and access the dashboard where data from the villages and payments systems is collated and analyzed, they can probe how thousands of the world’s poorest people use electricity and what encourages them to use more.

“Nobody has had this kind of data before,” says Moder. “It lowers barriers to investment, because the data provide greater certainly about payback. You can give investors real projections that aren’t a total guess.” Duby says the data also offer governments or donors the chance to directly subsidize solar power as it is purchased — a microgrid version of the feed-in tariffs that have kick-started solar and wind power in Europe.

The stories the data from places like Entasopia tell are not all good news. For instance, there is the experience of Margaret Mwangi, who set up a hair salon in the room behind her tiny general store across from Okoth’s bar. When Mwangi got solar power, she bought a refrigerator for selling cold drinks and a blow-drier for the salon. But each head of African hair takes 30 minutes to dry, and the power needed is costing too much.

“Last month I paid 14,000 shillings [about $140] for electricity,” she complains. “I can’t afford that.” She has stopped paying, and her shop is now dark.

Fred Pearce

<p><span>Nancy's Kasia's filling station is one of numerous businesses in Entasopia that have benefited from the new and reliable power from the microgrid.</span></p>

The reason for her problem is clear, says Nyagilo, the SteamCo field manager. Mwangi’s blow-drier is among the biggest power users in the village. Back in Nairobi they can see the power surge when she turns it on. Thirty minutes of use costs double the 50 cents extra that Mwangi charges her customers for the blow dry, but she says she dare not charge more.

“Margaret used to be our biggest customer here. We want her to stay,” Nyagilo says. He is planning to offer her a special deal to get her back on line — maybe a flat-rate $50-a-month charge.

Back at SteamaCo’s headquarters in a small business park outside Nairobi, Moder opens up the data dashboard on her laptop. Zooming in on the Entasopia numbers, she trawls to see how much power Mwangi, Okoth, and their other customers tap from the microgrid, and how much they pay and when. Most customers top up 50 cents each evening to watch TV and keep the lights on. Some lose track of what they are paying and need help.

“We need different tariff structures for different people,” she says. “But with smart meters that is easy to do.”

SteamaCo’s origins lie in an NGO called Access:Energy set up in 2009 by Duby and current CEO Harrsion Leaf on the shores of Lake Victoria. It trained local craftsmen in making wind turbines from scrap metal. But its technology has come a long way. Renamed SteamaCo, it installed its first microgrid system with smart metering in 2013, on Remba, a remote fishing island in Lake Victoria. Since then, expansion has been fast.

By mid-October, the company had 25 village grids across Kenya, with an additional five in Tanzania, Benin, Rwanda and Nepal, and five more ready for completion in Kenya by year’s end. “In 2016, we want hundreds of grids in dozens of countries,” says Moder.

Even though our customers are poor, they have purchasing power and know how to use it.

In its first years, the company financed its work with aid money and research grants. But early investors also included the Vulcan Capital, set up by Microsoft founder and philanthropist Paul Allen. And now Duby and Leaf are raising money from equity funds that want a commercial return from the revenues of selling electricity.

“We want to show this business can be profitable,” says Moder. “Even though our customers are poor, they have purchasing power and know how to use it. They don’t want charity, and we treat them as responsible consumers.” For instance, with revenues above $10,000 in its first year, SteamaCo’s microgrid in Entasopia is likely to have paid for itself within a decade.

SteamaCo provides a very personal service. Nyagilo has toured hundreds of remote villages in the past three years, knocking on doors and probing business accounts to conduct instant assessments of their suitability for a microgrid. And he keeps returning to check on his customers. These days, when he visits Entasopia, he is besieged by people who turned down connection the first time around but now want to sign up.

Soon such personal service from one of the company’s top officers will probably be replaced by more anonymous operations, as companies purchase SteamaCo’s hardware and software. Most likely, they will communicate with customers via call centers. But, if smart microgrids take hold at the pace their proponents hope, the change to rural economies and lifestyles in Kenya and elsewhere in the developing world could be massive and permanent.

When the sun sets in the Rift Valley now, the lights come on in Entasopia. Instead of retreating into their homes, villagers hit the street, shop at the stalls, and head for the bars, where drinking cool beer and watching the early-evening TV news is still a novelty. Soon Peter Okoth and rival bar operators will switch on their sound systems. The night is young.

On the road out, Nyagilo passes the neighboring village of Ngurumani, which is swathed in darkness. “This,” he says, “is our next village for a microgrid.”